KUALA LUMPUR: UEM Land Bhd has proposed a conditional takeover for all of Sunrise Bhd shares at RM2.80 per offer share via a share swap or an alternative offer by the issuance of redeemable convertible preference shares.
UEM Land announced on Thursday, Nov 4 the merger would result in the enlarged group benefiting from the stronger combined asset base of over RM5 billion.
“By leveraging on the Sunrise Group’s robust financial strength and prospects, UEM Land is expected to be better positioned to accelerate its own business expansion and to secure new development projects,” it said.
Under the corporate exercise, UEM Land had offered to acquire Sunrise shares (excluding treasury shares) at RM2.80 which would be via the issuance of UEM Land shares at an issue price of RM2.10 each. Sunrise shareholders would receive about 1.33 consideration shares for every one offer share.
The second option was through the issuance of redeemable convertible preference shares of one sen each in UEM Land (“RCPS”) at an issue price of RM1 each. Sunrise shareholder would receive 2.80 RCPS for every one offer share.
The proposed offer is conditional upon UEM Land having received, before the close of the proposed offer, valid acceptances which would result in the offeror holding more than 50% of the voting shares of Sunrise.
UEM Land and parties acting in concert with it are UEM Group Bhd and Khazanah Nasional Bhd.
It said under the RCPS alternative, assuming all the Sunrise shareholders elect for the RCPS alternative, UEM Land would raise up to RM1.8 billion upon full conversion of the RCPS.
UEM Land said as at Nov 4, it had obtained irrevocable undertakings from the shareholders, owning 199.81 million shares or 40.34% to accept the offer.
They are Casa Unggul Sdn Bhd which owns 120.91 million shares or 24.4%, Phoenixflex Sdn Bhd (41,91 million shares or 8.46%), Datuk Lim Kim Huat (35.85 million shares or 7.24%), Datuk Tong Kooi Ong (1.08 million shares or 0.22%) and Tan Sri Tan Chee Sing (52,000 shares or 0.01%). Tong is also executive chairman on Sunrise.
In a separate statement, Sunrise said: “The board has deliberated on the notice and does not intend to seek an alternative person to make a take?over offer for the offer shares.”
Sunrise said in accordance with the Malaysian Code on Take?Overs and Mergers, 1998, the board will appoint an independent adviser to advise the independent directors and holders in relation to the offer. T
Sunrise said the independent adviser would inform holders of their recommendation on the offer within 10 days from the posting of the offer document in relation to the offer.
Earlier, UEM Land said the group’s vast land bank in Nusajaya is expected to be the engine for growth and sustainable income over the mid-long term time horizon.
However, as the UEM Land Group’s property development activities in Nusajaya are still under various stages of development, the UEM Land Group’s current/historical profitability is not reflective of the value potential of such land holdings.
The proposed offer is expected to provide immediate enhancement to the UEM Land Group’s earnings as it would be able to consolidate the financial results of the Sunrise Group and leverage on its strong existing pipeline developments.
UEM Land said based on public announcements made by Sunrise, the company plans to launch four projects with a total gross development value of RM3.2 billion in its current FYE 30 June 2011 whilst as at June 30, 2010, the Sunrise Group had unbilled sales amounting to RM861 million.
UEM Land said the proposed offer will provide an opportunity to combine two synergistic and complementary property businesses, that is Sunrise’s property development business and UEM Land’s macro township development business, to create a stronger and larger property company which offers more comprehensive and diversified product range.
“With the proposed offer, the UEM Land Group is expected to benefit from the stronger combined asset base of over RM5 billion, positioning itself to be the largest listed property development company in Malaysia in terms of total asset. By achieving such critical mass, the enlarged UEM Land Group is well-equipped to implement its growth strategy and to achieve its aspirations of regional expansion,” it said.